RISK MANAGEMENT

Administrative Services and Risk Management

AGENDA

• Risk Management’s Mission

• Moving Forward

• Return to Work

• Contracts and Agreements

• Risk Assessments

MISSION

• To protect the people, property, environment, financial, and

other resources in support of the University’s teaching,

outreach, research, and student services.

TRADITIONAL RISK MANAGEMENT AND ERM

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Strategic Risk

Financial Risk

Operational Risk

Hazard Risk

Other Risk Reputational Risk

Compliance Risk

Traditional Risk

Management

Enterprise Risk Management

Traditional Risk Management

• Purchase insurance to cover risks

• Safety and emergency management handled separately

• Claims management handled separately

• Hazard-based risk identification and controls

• Compliance issues addressed separately

• “Silo” approach- risk management is not integrated across the institution

Advanced Risk Management

• Greater use of alternative risk financing

techniques

• More proactive about preventing and

reducing risks

• Integrates safety and emergency

management contracts review into risk

management process

• Cost allocation used for accountability

• More collaboration and fewer silos

Enterprise Risk Management

• A top-down approach aligns RM process with

strategy and mission

• Evaluation includes the “upside of risks” or

opportunities risk-taking offers

• Helps manage successful growth or program

expansion

• Risks are owned by all and mitigated at the

department level

• Many risk mitigation and analytical tools are

available

RISK MANAGEMENT MUST EVOLVE

Risk is perceived as negative-

Focus is on transferring risks

Risk is an expense- Focus is on

reducing cost-of-risk

Risk is uncertainty- Focus is on

optimizing risk taking to achieve goals

“GRAD ACT 2.0” ENACTED

(ACT 418 of 2011 Legislative Session)

ELIGIBILITY CERTIFICATION & APPLICATION ADMINISTRATION

Board of Regents (BOR)

OPERATIONAL CAPACITY DETERMINATION

Division of Administration (DOA)

AUTONOMY GRANTED

(Phased Plan of Implementation)

KEY STEPS TO AUTONOMY

Insurance

Programs

Property

Workers’ Compensation

Auto

Accident & Travel

* Excess property premiums pro-rated FY2013-FY1014

$-

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

$14,000,000.00

Reserves

Premiums

FISCAL IMPACT: STATE ORM PREMIUMS AND RESERVE ALLOCATION

FY 2003 — FY 2014

FISCAL IMPACT: PREMIUMS AND FUNDED RESERVES BY COVERAGE AREA

FY 2014

PROPERTY 60%

WORKER'S COMPENSATION

30%

GENERAL LIABILITY

6%

PERSONAL INJURY LIABILITY

2%

AUTO 2%

Other 0%

Property ** 60%

Worker's Compensation

29%

General Liability 8%

Automobile Liability 2% Other

1%

** Excess property premiums pro-rated FY2013-FY2014

WORKERS COMPENSATION

TOP 10 DEPARTMENTS TOTAL COST FY14 (AS OF 2/11/2014)

RISK ASSESSMENTS

Risk Appetite

Risk assessment is the identification and analysis of risks to the achievement of

business objectives. It forms a basis for determining how risks should be

managed.

• Allows us as an entity to understand the extent to which potential events might impact objectives.

• Assesses risks from two perspectives:

- Likelihood

- Impact

• Employs a combination of both qualitative and quantitative risk assessment methodologies.

• Relates time horizons to objective horizons.

RISK ASSESSMENTS

INDEMNIFICATION/ HOLD HARMLESS AGREEMENTS

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• Affirmative assumption of the finical

consequences for liabilities of another through

contract or agreement.

• Should not sign indemnification/hold harmless

agreements on behalf of the University without

Risk Managements review.

INSURANCE REQUIREMENTS

• Workers’ Compensation and Employers Liability:

• limits as required by the Labor Code of the State of Louisiana.

• General Liability:

• $1,000000 combined single limit per occurrence for bodily injury personal injury and

property damage.

• Automobile Liability:

• $1,000,000 combined single limit per accident for bodily injury and property

damage.

• An Umbrella Policy may be used to meet minimum requirements.

• Insurance Companies must have an A.M. Best's rating of A-:VI or higher

http://www.fas.lsu.edu/purchasing/insurancereq.htm

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MOU/AGREEMENTS/CONTRACTS/INTERNS

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• All contracts may be sent to Risk Management at any point in the development

process for review.

• Risk Management’s review will include the insurance requirements,

indemnification clauses and identify other liabilities or risks the University may

assume.

• If required Risk Management may also waive the insurance requirements upon

the complete of a risk assessment.

• Signature authority for an MOU, agreement or contract on behalf of the

University does not lie with the department and all should reviewed by Risk

Management.

lsu.edu/riskmgt

QUESTIONS

Colorado Robertson

colorado@lsu.edu

225-578-2249